ESM denies reports it will participate in plan to support Greek banks
‘The government in Athens is exploring an aid plan for domestic banks. Together with the euro rescue ESM and the Greek Banking Association, it is working on an ‘intervention plan’ to relieve banks of risk-burdened loans,’ FAZ reported.
The European Stability Mechanism has denied reports that it will participate in a plan to intervene to support Greek banks, whose shares have taken a terrible beating in the Athens Stock Exchange.
“This is erroneous,” an ESM representative said regarding press reports that it is “taking part in preparatory actions for a possible intervention plan to support Greek banks”.
“The ESM is closely monitoring the latest developments in the Greek banking sector, as part of its obligations as Greece’s biggest creditor.”
The denial concerned a report in the German daily Frankfurter Allgemeine Zeitung (FAZ).
“In response to a collapse of shares in large Greek banks, the government in Athens is exploring an aid plan for domestic banks. Together with the euro rescue ESM and the Greek Banking Association, it is working on an «intervention plan» to relieve banks of risk-burdened loans, it was said on Thursday in Athens,” FAZ reported yesterday, citing the Greek financial press, in an article entitled “Greek bank shares collapse”.
“According to the Greek financial press, a so-called bad bank is being considered. In this, lenders could outsource their «bad loans» and thus relieve their balance sheets. In principle, it would be possible for this «bad bank» to sell bonds to investors, some of which would be guaranteed by the state. It is about «bad loans» in the bank balance sheets worth a good 88 billion euros,” the article stated.